Will America become the next Greece?

If you aren’t subscribing to the LCG Commentary e-mails, you should! Here’s a quick blurb from the commentary just published this morning:

Politicians such as Senator Gregg and political pundits like Glenn Beck are right to sound the alarm.  But, their warnings are incomplete messages.  It is sin that is the root of U.S. economic trouble – not Keynesian versus Austrian economics, or Republican versus Democrat versus Tea Party politics, or FOX News versus CNN News versus NPR analysts!  What America really needs to understand and do is repent from breaking God’s biblical laws!

How I long for the days when QE2 was just the name of a big boat.

I am reminded of a quote I’ve kept for a while from an aside by the WSJ’s Daniel Henninger: “That Athens became the symbol of the democracies’ compulsion to spend themselves into oblivion is an eeriness we’d rather not ponder.”

It’s time to ponder.

Read the commentary! Better yet, subscribe!

3 thoughts on “Will America become the next Greece?

  1. texasborn

    Mr. Smith, I have finished reading a booklet titled The Rise of Financial Terrorism by Keith Fitz-Gerald. I thought you might find some of the statements in it very interesting.

    1. “The Federal Deposit Insurance Corporation reported that in 2009, U.S. banks made the lowest number of loans since…1942. All that money they were given by Obama to supposedly kick-start the economy went somewhere else.” (p.22)

    2. “…more commercial loans have gone sour in the last two years than in the last decade of the 1990s.” (p.37)

    3. “to take the unemployment rate down to 5%…we’d have to be creating 200,000 new jobs every month–for seven years.” (p.38)

    4. “Secretary Geithner testified on Capitol Hill…and told Congress that the federal government is now guaranteeing a full 95% of the nation’s mortgages.” (p.39)

    5. The $140 billion in bonuses that the bankers paid themselves last year set the all-time record. (p.40)

    6. Of “all those homeowners who’ve been getting ‘loan modifications’ from the banks…70% of all those bailed-out borrowers will default again…and soon.” (p.40)

    7. “Some 1,600 banks are at risk of failure, endangering the $3.2 trillion they hold in assets.” (p.42)

    8. “The next big bank run will probably be caused by the big institutions who handle other people’s money. They’ll freak out at the earliest hint of trouble. And they’ll make for the doors with their money. (That’s how WaMu lost $16 billion in deposits in its final eight days in 2008.)” (p.42)

    9. “The government is now making the major financial decisions on nearly 50% of all trade and commerce.” (p.43)

    10. “One line from Table S-4 in Obama’s budget:
    ‘On Table S-4 we see how just the interest payments on our national debt will explode from $164 billion this year to more than $1 trillion a year in a decade.’ ” (p.44)

    11. At “a recent meeting of Moody’s” (the bond ratings people)…of Obama’s 2011 budget, they said:
    ‘Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the AAA government bond rating.’ ” (p.45)

    12. “Indeed, a lot of speculators are quietly buying ‘credit default swaps’ that bet on U.S. Treasury bonds defaulting. These swaps are the kind of ‘derivative’ investments that got us into huge trouble in the first place. Now the speculators are running the same risky game in the biggest market in the world–U.S. Treasury bills.” (p.46)

    13.” But did you know that China also shot ahead of the U.S. last year as the world’s biggest importer of oil?” (p.52)

    14. “China bought 47% of our debt notes in 2006, then 20% in 2008, then 5% last year.” (p. 54) Do you see the downward trend? What will be the percentage by the end of 2010?

    15. “Almost nothing matters more than a president’s picks for Fed governors. The ‘Govs’ serve for 14 years–shaping the nation’s economy long after the president leaves office. Obama has now added three Govs: Peter Diamond, Sarah Raskin, and Janet Yellen. They’re a bright-enough lot from a look at their resumes. But, interestingly, only one has any actual banking experience. The rest are academics with no real-world appreciation of how money really works. ” (57)

    16. “In her first speech as a Gov, Janet Yellen made it clear,
    ‘I’m not alarmed by the current enormous deficits’ because they are ‘transitory and recession-related.’
    Not alarmed by a deficit that will soon swallow a trillion dollars a year just in interest payments? Well, she’ll fit right in with Ben Bernanke who claims not to be concerned about those pesky deficits, either.” (p.57)

    17.”Carmen Reinhart and Kenneth Rogoff in their book “This Time Is Different: Eight Centuries of Financial Folly,” they found that EVERY TIME a nation’s debt went over 90% of GDP…the nation failed. They studied 25 countries over 800 years. There were no exceptions to this 90% rule. Every nation that ran their debts too high is now off the map, or is a sorry has-been. Where is our country’s debt-to-GDP ratio now? Above 90%…and there’s no way we could possibly bring it down for decades. No way at all.” (p.61)

    Not a very pretty economic picture of the U.S., is it, Mr. Smith?

  2. Hi Mr. Smith,

    I sent in a couple of Commentary submissions early yesterday and was told by Mr. Ehman (at Personal Correspondence) that those in Charlotte are glad to get Commentary submissions and thus avoid repeated posts. Wouldn’t you know that the world decided to have yet another crisis and prompt Mr. Ciesielka’s outstanding effort – thus pre-empting me (and anybody else) this weekend. Ah, well, c’est la breaks. 😀

    Seriously, my mind boggles at how drastically the world is changing. In such a time not even I can continue to believe I live a sheltered life. 😦 Psalms 91, here we come!

  3. Point #17 reminds me of a saying ascribed to Albert Einstein: One definition of insanity is doing the same thing over and over and expecting a different result every time.

    At the rate things are going, what’s left of Western Civ. (despite the pundits saying that America is the West’s last, best hope of survival) will be running into Europe’s arms because there will be nowhere else, or better, to run.

What are you thinking?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s